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Offshore Trusts Report: Isle of Man

Legal Framework and Formation Rules and Fees

The Isle of Man law of trusts is based on English law and is to be found in the following acts:

  • Trustee Act 1961

  • Variation of Trusts Act 1961

  • Perpetuities and Accumulations Act 1968 (adoption of the Hague Convention)

  • Recognition of Trusts Act 1988

  • Trusts Act 1995

  • Purpose Trusts Act 1996

  • Fiduciary Services Acts 2000 and 2005

  • Trustee Act 2001

In addition, being a common law jurisdiction, there is a considerable amount of case law (mainly English) which is persuasive authority for the Manx courts. The distinctions between English law and Manx trust law arise principally from the fact that the Isle of Man has not adopted certain provisions of English trust law, for example, those relating to restrictions on accumulation of income. Appeal from the Isle of Man courts is to the Privy Council in London.

Trusts do not need to be registered unless they involve real estate on the island, when settlements inter vivos must be registered, or are public, i.e. charitable trusts, in which case they must file annual audited accounts, and are subject to supervision by Her Majesty’s Attorney-General in the Isle of Man. There are no other statutory accounting or auditing requirements and there is no need to file tax returns. However, trustees are obliged by law to inform the Assessor when there is, or may be, an Isle of Man income tax liability. The Isle of Man Income Tax Department issued Practice Note 160/09 in October 2009 to provide additional guidance on the tax obligations of trusts.

It is possible to obtain an advance clearance from the relevant registry based on a draft trust deed so that the identity of the settlor and the beneficiaries can be kept totally confidential. The maximum perpetuity for Manx trusts is generally 150 years (80 years for a purpose trust). There are no provisions for non-recognition of foreign judgements. Asset protection trusts are not available; however, it has been established in law that if transfers are made honestly, they will stand up to future claims.

The Trusts Act 1995 secured the position of trusts established in the Isle of Man in the face of challenges in the applicable governing law by other jurisdictions, particularly in the area of 'forced heirship'.

The Report

Offshore Trusts Guide: Introduction

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

Isle of Man News

IoM Consults On Funds Sector Rules
Monday 22/5/2017
The Isle of Man Financial Services Authority, which supervises the island's financial services sector, is seeking feedback on draft guidance dealing with the governance of collective investment schemes.

Record Turnout For Manx E-Gaming Summit
Wednesday 14/9/2016
The Isle of Man recently held its 13th annual E-Gaming Summit, which looked at regulatory challenges and opportunities and emerging trends in Fintech, data, cyber security, and blockchain technology.

IoM Companies Register Celebrates Digital Milestone
Monday 9/5/2016
The Isle of Man Companies Registry has announced that it has incorporated its first company through its new online service.

International Support For Beneficial Ownership Info Exchange
Wednesday 27/4/2016
More than 20 jurisdictions have signed up to a pilot project to exchange data held on beneficial ownership registers and registers of trusts, according to UK Chancellor George Osborne.

OFCs Join G5 Beneficial Ownership Initiative
Monday 25/4/2016
Bermuda, Gibraltar, and the Isle of Man Governments have agreed to support an initiative on the automatic exchange of beneficial ownership information, which is being spearheaded by the five largest economies in the European Union.

IoM Rejects Public Beneficial Ownership Register
Friday 26/2/2016
The Isle of Man has decided that it will not introduce a public register with information on the beneficial ownership of companies.

Gibraltar To Introduce Foundations
Wednesday 28/10/2015
The Government of Gibraltar has launched a consultation on the introduction of new legislation to permit the creation of private foundations.

Director Appointed To IoM's New Central Registry
Wednesday 12/8/2015
The Isle of Man has appointed a Director to lead the island's new Central Registry, after the amalgamation of several other registries with the Companies Registry earlier this year.

DeMontford Bell Expands Malta Operations
Wednesday 15/7/2015
DeMontford Bell, the UK-headquartered financial introducer, has announced that it is to expand its permanent operations in Malta to support the high volume of business migrating there.

IoM Forms First Company Exclusively With Bitcoin Capital
Wednesday 22/10/2014
The Isle of Man has enabled the formation of the first company with Bitcoin capital, Garigus Limited, as part of the territory's efforts to foster the creation of a niche market centered on digital currencies.